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Hit by recession, can Consumer Nation rethink?

A boy climbs on a giant boot outside the L.L. Bean store at Ross Park Mall in Ross Township, Pa.

AP Photo/Gene J. Puskar

By TED ANTHONYAP National Writer

Published: Saturday, March 21, 2009 at 12:02 p.m.

Last Modified: Saturday, March 21, 2009 at 12:11 p.m.

ROSS TOWNSHIP, Pa. (AP) — The first thing you see is the enormous boot.

Atop a ridge north of Pittsburgh, towering over customers at the entrance to Ross Park Mall, the giant L.L. Bean boot seems to shout: No buy is too big, no shopping dream too outsized. Come on in. Retail nirvana awaits. "Please do not climb on the boot," says a sign, as if we all might.

Yet selected items at Ann Taylor and Morini are 60 percent off. Le Gourmet Chef exhorts everyone to "Buy More $ave More" — a truth and a paradox that distills America into a bumper-sticker slogan. And just past the front door is the place that touts "Great Deals Inside." That would be Citizens Bank.

These are the contradictions that confront 21st-century America. We love to shop, but we need to save. We want it all, and we want it now. No matter whether it's a new pair of $100 jeans on your Visa, 90 days same as cash on that new car, a subprime mortgage. Psychologically, they're of a piece: Buy now, pay later. Shop 'til you drop.

Now we're paying. Now we're dropping. Credit — personal and institutional and national — is overextended into the absurd. Money that didn't exist in the first place is now frighteningly, heartbreakingly real. And the temples of our consumer choice are starting to crumble.

Chrysler and General Motors are wondering aloud if their century-old tanks are empty. Starbucks, home of the $4 venti latte, is laying off thousands and has — et tu, Brute? — launched a cheap brand of instant coffee. Circuit City expired two weeks ago, leaving 567 stores dark and Best Buy as the main place to shop for the 60-inch flat-screen HDTV you can't afford.

This is economic crisis. And in Washington and on Wall Street, they're scrambling to fix it with economic cures — useful ones or misguided ones, depending upon your perspective. But however effective they are, they remain attempts to impose a financial solution upon a dilemma that, in many ways, is cultural and behavioral.

Because in America, we consume. It is what we do, what we have been told to do, what our government usually tells us to do, what we love to do and what we must do. It has built us into a behemoth and undercut us at inopportune moments. Viewed from a distance, it's easy to see us as a nation of economic 5-year-olds, spending our allowance before we get it and demanding more, more, more, then being shocked when the money runs out.

Well, our revels now are ended. And at the edges of any economic recovery that might lie ahead lurks a question that few seem inclined to contemplate: At the dawn of the administration that swore it would bring change to us, can we bring change to ourselves?

___

The Jan. 29 White House daily briefing offered a telling moment when the question of what to do with federal stimulus money came up. "The point of an economic stimulus plan," presidential press secretary Robert Gibbs said, "is to get money into people's hands and into people's pockets so that they use their hand to reach in their pocket and spend that money."

But wait, someone said. Hold on. What about savings? Wasn't it the nationwide lack of savings and overextension of credit — institutional and personal — that got us into this mess? Gibbs was quick and emphatic: "I'm not discouraging savings," he said.

And therein lies the tension. It's like the old Warner Bros. cartoons in which Daffy Duck or some other character has miniature versions of himself on his shoulder — one a gentle angel, the other a pitchfork-wielding devil — giving him polar opposite accounts of what to do next. Shop? Save? Shop more?

The conundrum of America has long been thus — thrift and parsimony vs. capitalism and acquisition. Both are virtues. One is seen as small-town and heartland, and thus appealing. The other, on an institutional level, elevated America into an economic giant and, on a personal level, made us a nation of debtors with really cool toys and houses we can't pay for.

They can seem irreconcilable. Even as Calvin Coolidge was cautioning that "thrift and self-control are not sought because they create wealth, but because they create character," John Maynard Keynes was insisting that "the engine which drives enterprise is not thrift, but profit."

When bad things happen, the instinct is to batten the hatches and not spend. That's why George W. Bush had to tell us to get out and shop after 9/11. As absurd as it sounded, the message was solid: Don't quit the economy or it will quit you.

But the genius of America has always been its penchant for believing in better days ahead, not worse ones, so it's difficult to justify saving for a rainy day when the national narrative expects sunny skies. That's why about the only thing that made sense in Jim Cramer's comments to Jon Stewart earlier this month was when he said that of course he thought the market would keep going up; hadn't it been doing so for years?

Is it any wonder we're confused?

Slowly, though, signs are emerging that suggest the recent months of economic free fall and attendant angst have gotten our attention. Luxury shopping — goods bought at places like Coach and Neiman Marcus — was down 19.2 percent in February from a year ago, according to the International Council of Shopping Centers. And an AP/GfK poll last month showed that 65 percent of Americans questioned worried about whether they'd be able to pay their bills.

"Mentally, it's already changing. We always wondered, what were they like, those people of the Great Depression — how did they learn how to save? And now we're becoming like them," says Amity Shlaes, author of "The Forgotten Man: A New History of the Great Depression."

Amid the encouragement to buy, encouragements to save — truly save rather than just buy one and get one free — are emerging.

Feedthepig.org, a savings advice site, enlists a straight-talking pig in a pink suit named Benjamin — alarming but effective — to encourage young adults from 25 to 34 to stick coins into the slot in his head. Its Web traffic soared by almost 40,000 in January as the recession deepened. Its all-ages counterpart, 360financialliteracy.org, which doesn't use talking ham, breaks down financial common sense into life stages with a depth and breadth that would make Ben Franklin's penny-saved heart soar.

What's particularly interesting about these initiatives is who's behind them: the professional organization for American accountants, AICPA, whose leaders were alarmed when they learned three years ago that the national savings rate was a negative figure for the first time since the Depression.

"As a nation, economically, I think we got very soft. It just got too easy," says Carl George, CEO of the Illinois accounting firm Clifton Gunderson and chairman of the National CPA Financial Literacy Commission.

"The message has been let's revitalize or make the economy more vital, and the way to do that is to insert your own personal capital into the economy," George says. "And I think, 'OK, that's a good message IF you can afford it.' But you know what? If you can't afford to go out and buy that widescreen ... you haven't done anybody any good."

Americans are not known for being introspective, but rage at the Bernard Madoffs of the world may be encouraging even that. People look at the CEOs and the big-bank bailouts and the private jets, and suddenly Gordon Gekko saying "Greed is good" doesn't sound all that cinematic anymore.

Lydia Perez-Carpenter, an actress and waitress in New York, sees some of that. At 25, she has seen many friends in recent months "finding the cheap way of doing what we want to do" or, even, contemplating savings and frugality. She has put a rubber band around her credit card to remind herself that it's money she doesn't have.

"Most of my generation has this concept that, 'Oh, I'll just put it on my credit card.' Then we're sitting here paying hundreds of dollars a month on credit-card debt, and it'll never go away," she says. "We definitely need an attitude adjustment. The American way of thinking in my mind is wanting whatever we want now with very little long term-thinking. Hopefully that's changing."

Wishful thinking, but perhaps realism's moment is at hand. Can it be we didn't realize that our instant-gratification culture ran so deep that it permeated not only our wallets and our attitudes but our financial institutions as well? Can it further be that the vaunted indicator of "consumer confidence" is a double-edged sword, and that buying — pardon, "infusing money into the economy" — isn't the best starting point from which to view our lot?

Tod Porter, who heads the economics department at Youngstown State University in Ohio, one of the country's most struggling areas, sees us struggling through the cloudy waters of what economists call "the paradox of thrift." In this model, savings operates like a daily multivitamin. In sensible doses it is a virtue that fosters stability and keeps the system strong. But in excess, it can be poisonous to the system by reducing the demand for goods and services — and making bad recessions worse.

For the moment, though, we are reaping the aftereffects of not taking our vitamins. The system is broken, and many of the vandals are, in fact, us.

"It was like Wile E. Coyote running off the cliff, and for a while he doesn't realize there's nothing underneath him. And that can only last so long," Porter says. His voice trails off, and he poses a question.

"At what point does everybody realize the game is up?"

___

So can we change? Or will we be forever captivated by the enormous shopping-mall boot and the retail booty that lies beyond? For some answers, let's look to a movie in theaters right now called "Confessions of a Shopaholic."

It is about Rebecca Bloomwood (Isla Fisher), a young professional who's addicted to shopping, considers $200 underwear a "basic human right" and offers pop wisdom like this: "A man will never love you or treat you as well as a store."

This is documentary masquerading as frothy screwball comedy. For Rebecca slowly begins to realize that her lust for purchasing is leading her to lie, ruin her finances and alienate the man she loves. Because she buys, her world comes crashing down. And it bewilders her. "When I shop," she says, "the world gets better. The world IS better. Then it's not anymore. And I need to do it again."

Funny thing, though, how the film's contradictions so starkly reflect our own at this moment in history. Rebecca's parents frequent thrift stores and flea markets, the out-of-touch but heartfelt vestiges of an America that once saved and reused. A debt collector who stalks Rebecca is an obnoxious nerd, because responsibility, after all, isn't cool. And at the end, when Rebecca makes her choice between shopping and love, her moral compass points right at the North Pole of traditional values.

Then the credits roll. And in the acknowledgments, the producers thank Prada and Fendi and Anna Sui.

"We have lived," Barack Obama said last month, "through an era where too often short-term gains were prized over long-term prosperity, where we failed to look beyond the next payment, the next quarter, or the next election." Is it any wonder that a society always so obsessed with the excitement of tomorrow somehow neglected the reality of it?

Something is at hand here. What it is — well, we are the ones charged with defining that. Where do we find our answers? In understanding better why we do what we do and buy what we buy? In the anger that hey — those government and corporate guys are spending beyond their means, and whoa, so are we?

Or is it all, in the time-honored American tradition, just a blip that we'll forget when the Dow rises and the banks resume lending and the leading economic indicators are once more pointing toward the sky?

Decision 2008 is behind us. Decision 2009 is of a different species. It is not either-or, not a horse race, not a sound bite. It is about how society — and that means he and she and, yes, you — is going to think about things like instant gratification and the hunger for newness and the envelopes with the glassine windows that keep arriving in the mail.

Carl George, the accountant, is what some of the TV financial talking heads like to call "cautiously optimistic" that we'll learn something here. "This is going to be permanently embedded in our minds — and should be," he says. "The key is to remember those lessons and pass those lessons on to the next generation."

In other words, thinking about the future, one of the most American things of all. It can save us or destroy us, depending on what we do next.

<p>ROSS TOWNSHIP, Pa. (AP)  The first thing you see is the enormous boot.</p><p>Atop a ridge north of Pittsburgh, towering over customers at the entrance to Ross Park Mall, the giant L.L. Bean boot seems to shout: No buy is too big, no shopping dream too outsized. Come on in. Retail nirvana awaits. "Please do not climb on the boot," says a sign, as if we all might.</p><p>Inside, along buffed corridors freshly retooled to ramp up the aura of luxury, storefront signs spin a tale of a culture in conflict. "More choices coming soon," says a store under construction. "Unmounted Diamond Event," trumpets Littman Jewelers.</p><p>Yet selected items at Ann Taylor and Morini are 60 percent off. Le Gourmet Chef exhorts everyone to "Buy More $ave More"  a truth and a paradox that distills America into a bumper-sticker slogan. And just past the front door is the place that touts "Great Deals Inside." That would be Citizens Bank.</p><p>These are the contradictions that confront 21st-century America. We love to shop, but we need to save. We want it all, and we want it now. No matter whether it's a new pair of $100 jeans on your Visa, 90 days same as cash on that new car, a subprime mortgage. Psychologically, they're of a piece: Buy now, pay later. Shop 'til you drop.</p><p>Now we're paying. Now we're dropping. Credit  personal and institutional and national  is overextended into the absurd. Money that didn't exist in the first place is now frighteningly, heartbreakingly real. And the temples of our consumer choice are starting to crumble.</p><p>Chrysler and General Motors are wondering aloud if their century-old tanks are empty. Starbucks, home of the $4 venti latte, is laying off thousands and has  et tu, Brute?  launched a cheap brand of instant coffee. Circuit City expired two weeks ago, leaving 567 stores dark and Best Buy as the main place to shop for the 60-inch flat-screen HDTV you can't afford.</p><p>This is economic crisis. And in Washington and on Wall Street, they're scrambling to fix it with economic cures  useful ones or misguided ones, depending upon your perspective. But however effective they are, they remain attempts to impose a financial solution upon a dilemma that, in many ways, is cultural and behavioral.</p><p>Because in America, we consume. It is what we do, what we have been told to do, what our government usually tells us to do, what we love to do and what we must do. It has built us into a behemoth and undercut us at inopportune moments. Viewed from a distance, it's easy to see us as a nation of economic 5-year-olds, spending our allowance before we get it and demanding more, more, more, then being shocked when the money runs out.</p><p>Well, our revels now are ended. And at the edges of any economic recovery that might lie ahead lurks a question that few seem inclined to contemplate: At the dawn of the administration that swore it would bring change to us, can we bring change to ourselves?</p><p>___</p><p>The Jan. 29 White House daily briefing offered a telling moment when the question of what to do with federal stimulus money came up. "The point of an economic stimulus plan," presidential press secretary Robert Gibbs said, "is to get money into people's hands and into people's pockets so that they use their hand to reach in their pocket and spend that money."</p><p>But wait, someone said. Hold on. What about savings? Wasn't it the nationwide lack of savings and overextension of credit  institutional and personal  that got us into this mess? Gibbs was quick and emphatic: "I'm not discouraging savings," he said.</p><p>And therein lies the tension. It's like the old Warner Bros. cartoons in which Daffy Duck or some other character has miniature versions of himself on his shoulder  one a gentle angel, the other a pitchfork-wielding devil  giving him polar opposite accounts of what to do next. Shop? Save? Shop more?</p><p>The conundrum of America has long been thus  thrift and parsimony vs. capitalism and acquisition. Both are virtues. One is seen as small-town and heartland, and thus appealing. The other, on an institutional level, elevated America into an economic giant and, on a personal level, made us a nation of debtors with really cool toys and houses we can't pay for.</p><p>They can seem irreconcilable. Even as Calvin Coolidge was cautioning that "thrift and self-control are not sought because they create wealth, but because they create character," John Maynard Keynes was insisting that "the engine which drives enterprise is not thrift, but profit."</p><p>When bad things happen, the instinct is to batten the hatches and not spend. That's why George W. Bush had to tell us to get out and shop after 9/11. As absurd as it sounded, the message was solid: Don't quit the economy or it will quit you.</p><p>But the genius of America has always been its penchant for believing in better days ahead, not worse ones, so it's difficult to justify saving for a rainy day when the national narrative expects sunny skies. That's why about the only thing that made sense in Jim Cramer's comments to Jon Stewart earlier this month was when he said that of course he thought the market would keep going up; hadn't it been doing so for years?</p><p>Is it any wonder we're confused?</p><p>Slowly, though, signs are emerging that suggest the recent months of economic free fall and attendant angst have gotten our attention. Luxury shopping  goods bought at places like Coach and Neiman Marcus  was down 19.2 percent in February from a year ago, according to the International Council of Shopping Centers. And an AP/GfK poll last month showed that 65 percent of Americans questioned worried about whether they'd be able to pay their bills.</p><p>"Mentally, it's already changing. We always wondered, what were they like, those people of the Great Depression  how did they learn how to save? And now we're becoming like them," says Amity Shlaes, author of "The Forgotten Man: A New History of the Great Depression."</p><p>Amid the encouragement to buy, encouragements to save  truly save rather than just buy one and get one free  are emerging.</p><p>Feedthepig.org, a savings advice site, enlists a straight-talking pig in a pink suit named Benjamin  alarming but effective  to encourage young adults from 25 to 34 to stick coins into the slot in his head. Its Web traffic soared by almost 40,000 in January as the recession deepened. Its all-ages counterpart, 360financialliteracy.org, which doesn't use talking ham, breaks down financial common sense into life stages with a depth and breadth that would make Ben Franklin's penny-saved heart soar.</p><p>What's particularly interesting about these initiatives is who's behind them: the professional organization for American accountants, AICPA, whose leaders were alarmed when they learned three years ago that the national savings rate was a negative figure for the first time since the Depression.</p><p>"As a nation, economically, I think we got very soft. It just got too easy," says Carl George, CEO of the Illinois accounting firm Clifton Gunderson and chairman of the National CPA Financial Literacy Commission.</p><p>"The message has been let's revitalize or make the economy more vital, and the way to do that is to insert your own personal capital into the economy," George says. "And I think, 'OK, that's a good message IF you can afford it.' But you know what? If you can't afford to go out and buy that widescreen ... you haven't done anybody any good."</p><p>Americans are not known for being introspective, but rage at the Bernard Madoffs of the world may be encouraging even that. People look at the CEOs and the big-bank bailouts and the private jets, and suddenly Gordon Gekko saying "Greed is good" doesn't sound all that cinematic anymore.</p><p>Lydia Perez-Carpenter, an actress and waitress in New York, sees some of that. At 25, she has seen many friends in recent months "finding the cheap way of doing what we want to do" or, even, contemplating savings and frugality. She has put a rubber band around her credit card to remind herself that it's money she doesn't have.</p><p>"Most of my generation has this concept that, 'Oh, I'll just put it on my credit card.' Then we're sitting here paying hundreds of dollars a month on credit-card debt, and it'll never go away," she says. "We definitely need an attitude adjustment. The American way of thinking in my mind is wanting whatever we want now with very little long term-thinking. Hopefully that's changing."</p><p>Wishful thinking, but perhaps realism's moment is at hand. Can it be we didn't realize that our instant-gratification culture ran so deep that it permeated not only our wallets and our attitudes but our financial institutions as well? Can it further be that the vaunted indicator of "consumer confidence" is a double-edged sword, and that buying  pardon, "infusing money into the economy"  isn't the best starting point from which to view our lot?</p><p>Tod Porter, who heads the economics department at Youngstown State University in Ohio, one of the country's most struggling areas, sees us struggling through the cloudy waters of what economists call "the paradox of thrift." In this model, savings operates like a daily multivitamin. In sensible doses it is a virtue that fosters stability and keeps the system strong. But in excess, it can be poisonous to the system by reducing the demand for goods and services  and making bad recessions worse.</p><p>For the moment, though, we are reaping the aftereffects of not taking our vitamins. The system is broken, and many of the vandals are, in fact, us.</p><p>"It was like Wile E. Coyote running off the cliff, and for a while he doesn't realize there's nothing underneath him. And that can only last so long," Porter says. His voice trails off, and he poses a question.</p><p>"At what point does everybody realize the game is up?"</p><p>___</p><p>So can we change? Or will we be forever captivated by the enormous shopping-mall boot and the retail booty that lies beyond? For some answers, let's look to a movie in theaters right now called "Confessions of a Shopaholic."</p><p>It is about Rebecca Bloomwood (Isla Fisher), a young professional who's addicted to shopping, considers $200 underwear a "basic human right" and offers pop wisdom like this: "A man will never love you or treat you as well as a store."</p><p>This is documentary masquerading as frothy screwball comedy. For Rebecca slowly begins to realize that her lust for purchasing is leading her to lie, ruin her finances and alienate the man she loves. Because she buys, her world comes crashing down. And it bewilders her. "When I shop," she says, "the world gets better. The world IS better. Then it's not anymore. And I need to do it again."</p><p>Funny thing, though, how the film's contradictions so starkly reflect our own at this moment in history. Rebecca's parents frequent thrift stores and flea markets, the out-of-touch but heartfelt vestiges of an America that once saved and reused. A debt collector who stalks Rebecca is an obnoxious nerd, because responsibility, after all, isn't cool. And at the end, when Rebecca makes her choice between shopping and love, her moral compass points right at the North Pole of traditional values.</p><p>Then the credits roll. And in the acknowledgments, the producers thank Prada and Fendi and Anna Sui.</p><p>"We have lived," Barack Obama said last month, "through an era where too often short-term gains were prized over long-term prosperity, where we failed to look beyond the next payment, the next quarter, or the next election." Is it any wonder that a society always so obsessed with the excitement of tomorrow somehow neglected the reality of it?</p><p>Something is at hand here. What it is  well, we are the ones charged with defining that. Where do we find our answers? In understanding better why we do what we do and buy what we buy? In the anger that hey  those government and corporate guys are spending beyond their means, and whoa, so are we?</p><p>Or is it all, in the time-honored American tradition, just a blip that we'll forget when the Dow rises and the banks resume lending and the leading economic indicators are once more pointing toward the sky?</p><p>Decision 2008 is behind us. Decision 2009 is of a different species. It is not either-or, not a horse race, not a sound bite. It is about how society  and that means he and she and, yes, you  is going to think about things like instant gratification and the hunger for newness and the envelopes with the glassine windows that keep arriving in the mail.</p><p>Carl George, the accountant, is what some of the TV financial talking heads like to call "cautiously optimistic" that we'll learn something here. "This is going to be permanently embedded in our minds  and should be," he says. "The key is to remember those lessons and pass those lessons on to the next generation."</p><p>In other words, thinking about the future, one of the most American things of all. It can save us or destroy us, depending on what we do next.</p>